Protesters chant slogans outside Taiwan's parliament on March 22, calling on the legislature to reject a contentious trade pact with China.

AFP: Sam Yeh

Taiwan's prime minister Jiang Yi-huah says his government will not withdraw a contentious trade pact with China, rejecting calls from protestors occupying parliament to stop its ratification.

In the first direct dialogue between the government and protestors, Mr Jiang walked to the parliament building surrounded by bodyguards as some protestors jostled and shouted "step down" in footage broadcast live on local television.

"The cabinet sent the service trade pact to parliament because we think it will help Taiwan's liberalisation and internationalisation. We do not plan to withdraw [it]," Mr Jiang told the crowd gathered on the streets outside.

Mr Jiang added that he would, however, support a thorough article-by-article review of the pact by parliament, as some protestors shouted "send back the pact".

The agreement is designed to open up further trade in services between China and Taiwan, which split 65 years ago after a civil war.

But the protestors say the deal will damage Taiwan's economy and leave it vulnerable to political pressure from China, allegations rejected by president Ma Ying-jeou's ruling Kuomintang party, which warns that failure to ratify the agreement would be a grave setback in Taiwan's efforts to seek more free trade agreements.

First signed in July, protestors have demanded Mr Ma "return" the service trade pact to China, rejecting the government's bid to push ahead with plans to ratify it.

More than 200 student protestors stormed the parliament's main chamber on Tuesday and have remained there ever since, the first such occupation of the building in Taiwan's history.

Hundreds of police attempted to barge their way in to end the occupation hours after it began, but they failed to breach the improvised barricades fashioned by the students out of piles of armchairs.

The activists vowed to continue their action following the premier's remarks on Saturday.

"We have insisted for five days that the students inside the chamber and those outside let us continue and invite more friends to join us," student leader Lin Fei-fen told the crowd after interrupting Mr Jiang and asking him to leave the protest scene.

The pact passed its first parliamentary hurdle on Monday after it was approved by a committee, but the opposition insisted the approval was illegal.

The deal is a follow-up agreement to a sweeping Economic Cooperation Framework Agreement signed in 2010 to reduce trade barriers between China and Taiwan.

Mr Ma has overseen a marked thaw in relations with Beijing since he came to power in 2008, pledging to strengthen trade and tourism links.

But China still considers Taiwan as part of its territory awaiting reunification - by force if necessary.